I think Loonie really wants to tag parity one more time; heck this range has been going on for so long why break out long now and ruin a good thing eh?

Tonight I like this potential short trade on the Dollar / Swissy. The institutional folks went net short last week and I think a one hour candle break below the short trend line will lead us down to the lower trend line on the four hour chart.

Literally 15 minutes after posting the long trade idea USD/JPY breaks down, the long idea is null and void for now.

Tonight I’m watching a possible long USD/JPY trade ahead of the London session. I like the bull flag following the long rally from $106.30 and if the short resistance line falls I believe the pair will test the $108.00 level again.

Of course, it could fall apart too which is why we wait and see… There are also some nice channels on EUR/USD and GBP/USD tonight which I am also considering trades on, the EUR/USD especially. I’d go into more detail on them but my poodle is begging to be let out so go check your charts!

Best of luck!

Ryan

Quick update on the USD/CAD short I posted last week. While the trade is in the money now, I’m less convinced the fundamental picture will push the Dollar lower. High inflation numbers have driven the Fed to make it clear controlling inflation is their higher priority now but will they raise interest rates ahead of schedule? Perhaps, perhaps not. We are at the bottom of a daily chart bull flag formation and I’ve opted to play it safe and protect the position with a break even stop. We may break below and continue where on the origional plan but when the fundamental picture swings in a new direction, you have to adjust.

Best of luck,

Ryan

I’ve decided to get short USD/CAD tonight for the following reasons:

1. Bank of Canada held rates at 3% rather than cut to 2.75%, with hawkish tones surprising the market today. The easing cuts appear to be over with for now.
2. Technically speaking the daily chart printed a huge reversal candle against well established resistance today.
3. Institutional positions are still net short the pair.
4. Interest rate carry is in my favor on a short.
5. Oil, Oil, Oil, Oil oh yeah.. and Oil….(not the biggest factor, but it helps)

I’m short at $1.0226.

Best of luck,

Ryan

Down the road from my house there is a gas station and general store which says it was established in 1900. I don’t know what a gallon of gas cost in 1900 but at last check their price for regular was about $4.06 a gallon. Above is a new “Gas Voucher” idea the Treasury Department could start issuing; I think Honest Abe looks pretty good.

End of the Month

Today there are holidays in the U.S. and U.K. so if your trying to trade your crazy. I take the last week of the month off as time to reflect on the months trades, catch up on paperwork and generally take my mind off trading. If you are close or have achieved your monthly trading goals for May I encourage you to go outside and play Frisbee. Do anything but trade this week and you’ll keep all that tasty profit in your account. Even if you haven’t met your goals or even taken a loss this month, that is OK. Stop and have some fun this week. Relax your brain now and you’ll be better equipped for June.

Best of luck,

Ryan

Monday’s EUR/USD long trade idea has done very well. Depending on where you got long the trade is now floating around 200 points in the money. My fear that U.S. PPI would surprise to the upside was wrong giving our long position some nice legs to stand on.

The market is currently trading near my 1st profit target so if your still in this trade it is time to take some money off the table and adjust your stops. Initially my stops were 50 points giving this trade a 4:1 risk-to-reward ratio.

Hope you got some points on this one! I’m done for the week.

Ryan

I like what I see on this EUR/USD chart for entering long EUR again. We have completed an inverted head and shoulders pattern who’s head happens to fall at 38.2% support level on the latest rally.

Fundamental event risk is in US PPI and German IFO numbers. US PPI is forecast to be lower than the previous reported but my gut tells me it will surprise to the upside with rising costs finally being passed to the consumer. That being said we did see a smart test of $1.56 and the neck line of the head and shoulders appears to be holding.

The long would be as close to $1.55 as you can get, stops below at least short term support ($1.5480) or lower. I’m long at $1.5529.

Best of luck, and remember if the fundamental picture changes get out of the way.

Ryan

My Uncle Richard said it best, “If I could trade one day late I’d be a rich man.”

I blog to help you become a better trader and this morning’s USD/CAD short trade is a perfect opporuntity to expose a classic blunder. Check the charts and you will see Dollar rallied in the New York session taking my stops out.

I seek two things when entering a trade. First I need a fundamental reason to trade. Second I need a technical reason to enter the market. Today’s trade had a technical reason but lacked a strong fundamental reason to short the USD/CAD.

Money management aside, successful trading comes by selling the absolute weakest currency against the absolute strongest currency regardless of what “system” you use to enter the market.

The USD/CAD was rather evenly matched and as the New York session unfolded the data got stronger for Dollar which invalidated the technical opportunity even further.

In hindsight better fundamental reasons to sell GBP and EUR existed today due to lower Industrial Production and Retail Sales numbers released overnight.

So remember the lesson; sell the weak and buy the strong. If you make the same blunder I did let your stops do their job and move on.

“You can’t win them all.”

Connie Mack

Best of luck,

Ryan